Turkey has stressed that its banking sector remains firm, describing the recent price formations in foreign exchange markets as completely detached from economic fundamentals.
The Turkish banking sector is "very strong," and one of the most successful in the world, Central Bank governor Sahap Kavcioglu told a group of journalists after meeting with public and private banking officials and bank CEOs in Istanbul on Thursday.
The meeting discussed a range of issues, including inflation, monetary policy, and global developments.
Kavcioglu’s remarks came amid fluctuating foreign exchange rates in the wake of interest rate cuts by the Central Bank.
'Unrealistic' price formations
In a Tuesday statement, the bank decried “unhealthy” and “unrealistic” price formations in foreign exchange markets, saying they are completely detached from economic fundamentals.
Commenting on volatility in the foreign exchange markets, Turkey’s Central Bank on Tuesday decried “unhealthy” and “unrealistic” price formations in those markets, saying they are completely detached from economic fundamentals.
"Exchange rates are determined by supply and demand conditions according to free market dynamics. Under certain conditions, the Central Bank may only intervene in excessive volatility without aiming (in) any permanent direction," it said in a statement.
The value of the Turkish lira has recently plummeted more than 12 percent against major foreign currencies.